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AVT

Avnet NasdaqGS:AVT Stock Report

Last Price

US$45.77

Market Cap

US$4.2b

7D

5.2%

1Y

16.9%

Updated

18 Aug, 2022

Data

Company Financials +
AVT fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance5/6
Financial Health4/6
Dividends2/6

AVT Stock Overview

Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components.

Avnet Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Avnet
Historical stock prices
Current Share PriceUS$45.77
52 Week HighUS$50.19
52 Week LowUS$35.71
Beta1.29
1 Month Change2.88%
3 Month Change-1.15%
1 Year Change16.91%
3 Year Change8.43%
5 Year Change23.87%
Change since IPO188.32%

Recent News & Updates

Aug 10

Avnet Non-GAAP EPS of $2.07 beats by $0.08, revenue of $6.37B beats by $80M

Avnet press release (NASDAQ:AVT): Q4 Non-GAAP EPS of $2.07 beats by $0.08. Revenue of $6.37B (+21.8% Y/Y) beats by $80M. Farnell achieves record revenues of $1.8 billion with operating margin over 13%. Adjusted operating income margin of 4.5%, increased 161 basis points year over year. Returned $25 million to shareholders in dividends during the quarter, an 18% per share increase year over year. Shares -5.49%.

Aug 04

Avnet: Volatility Is Playing Well For Shareholders

Avnet has had a nice run higher recently, driven by attractive fundamental performance. Current expectations for the firm are positive and AVT stock looks cheap. Even a return to more normal activity should offer investors with some upside potential from here. Although the nature of value investing is to gravitate toward companies that are less volatile, a firm can be both attractive and volatile at the same time. One good example of this can be seen by looking at Avnet (AVT), a global technology distributor and solutions company that sells electronic components and provides various services to its customers related to the development, prototyping, and testing of products. Although the company's fundamental condition has been volatile in recent years, the overall picture has been positive. Add on top of this the fact that shares have recently traded at low levels, and it stands to reason that there could be some nice upside on the table moving forward. Of course, these are uncertain times and the picture for any one business can change materially from quarter to quarter. And with the enterprise slated to report financial performance for the final quarter of its 2022 fiscal year on August 10th, investors should keep a close eye on what management is expecting and on what analysts think will occur. So long as there is not anything significantly negative, upside potential for investors could be quite nice. And because of this, I have decided to retain my ‘buy’ rating on its stock even though shares have risen nicely in the past few months. Avnet's strength continues Back in March of this year, I wrote an article that looked upon Avnet in a favorable light. In that article, I said that the enterprise had a history of consistent revenue growth if we ignore the pain caused by the COVID-19 pandemic. On the other hand, I said that profits and cash flows have been more volatile during the past few years. Despite this, I said that shares of the company looked cheap and that recent performance indicated further upside was probably on the table. Ultimately, this led me to rate the business a ‘buy’, reflecting my belief that it would probably outperform the broader market for the foreseeable future. So far, that claim has played out pretty well. While the S&P 500 is down 4% since the publication of that article, shares of Avnet have risen by 18.5%. Author - SEC EDGAR Data This increase during a down market is not without cause. Consider how the company fared when it reported results for the third quarter of its 2022 fiscal year, the only quarter for which new data is now available that was not available when I last wrote about the business. In that quarter, sales for the firm skyrocketed, rising by 32% from $4.92 billion in the third quarter of 2021 to $6.49 billion the same time this year. Had foreign currency remained stable year over year, sales growth would have been even higher at 35.7%. According to management, this increase in revenue was driven pretty much entirely by strong demand for electronic components and for the services it offers. Thanks to strong revenue in that third quarter, revenue for the first nine months of the 2022 fiscal year remained strong, coming in at $17.94 billion. That's 25.4% above the $14.31 billion generated just one year earlier. Author - SEC EDGAR Data This surge in revenue brought with it a rise and profitability as well. Net income in the latest quarter totaled $183.4 million. That compares to the $107.5 million reported in the third quarter of 2021. Operating cash flow rose from negative $9.9 million to a positive $243.8 million. If we adjust for changes in working capital, it would have risen from $159.4 million to $273.5 million. Meanwhile, EBITDA jumped from $139.7 million to $347.5 million over the same timeframe. These results had the positive impact of helping profitability for the first nine months of the year as a whole. That income, for instance, rose from $107.8 million in the first nine months of the firm's 2021 fiscal year to $445.6 million this year. Operating cash flow dropped from $197.5 million to negative $19.4 million, while the adjusted figure for this jumped from $309.5 million to $641.3 million. And EBITDA managed to soar from $386.9 million to $832.5 million. In addition to benefiting from an increase in sales, the surge in demand allowed the company to push its cost structure lower. Gross profit margin, for instance, improved thanks to sales growth in the higher-profit western regions in which it operates. And with demand so high, the company didn't have to spend as much, relative to sales, on selling, general, and administrative costs. It's also worth noting that this strong bottom line performance came even as the company incurred $26.3 million in expenses associated with the conflict between Russia and Ukraine. At present, the current expectation is for the company to continue to generate strong performance when it reports data for the final quarter of the year. Management previously forecasted revenue of between $6 billion and $6.4 billion for the quarter. That compares to the $4.16 billion the company reported in the final quarter of its 2021 fiscal year. Meanwhile, analysts think that revenue will come in at about $6.29 billion. But if the third quarter was any indication, the firm might overdeliver. In that third quarter, the company beat on expectations to the tune of $779.68 million. And when it comes to profitability, management currently expects earnings per share of between $1.90 and $2. At the midpoint, this would translate to net income of $194 million. One year earlier, earnings per share totaled just $0.53. These numbers are not too far off from what analysts anticipate. At present, analysts believe the company will report earnings $1.82, with adjusted earnings per share of $1.99. It will be interesting to see how current economic conditions impact the end result.

Shareholder Returns

AVTUS ElectronicUS Market
7D5.2%1.2%1.1%
1Y16.9%-11.6%-9.0%

Return vs Industry: AVT exceeded the US Electronic industry which returned -11.6% over the past year.

Return vs Market: AVT exceeded the US Market which returned -9% over the past year.

Price Volatility

Is AVT's price volatile compared to industry and market?
AVT volatility
AVT Average Weekly Movement4.5%
Electronic Industry Average Movement7.4%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

Stable Share Price: AVT is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: AVT's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
192115,300Phil Gallagherhttps://www.avnet.com

Avnet, Inc., a technology solutions company, markets, sells, and distributes electronic components. The company operates through two segments, Electronic Components and Farnell. The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical devices; and other integrated components from electronic component manufacturers.

Avnet Fundamentals Summary

How do Avnet's earnings and revenue compare to its market cap?
AVT fundamental statistics
Market CapUS$4.20b
Earnings (TTM)US$692.38m
Revenue (TTM)US$24.31b

6.3x

P/E Ratio

0.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
AVT income statement (TTM)
RevenueUS$24.31b
Cost of RevenueUS$21.35b
Gross ProfitUS$2.97b
Other ExpensesUS$2.27b
EarningsUS$692.38m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.31
Gross Margin12.20%
Net Profit Margin2.85%
Debt/Equity Ratio38.4%

How did AVT perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

14%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is AVT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AVT?

Other financial metrics that can be useful for relative valuation.

AVT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.2x
Enterprise Value/EBITDA5.4x
PEG Ratio-1.2x

Price to Earnings Ratio vs Peers

How does AVT's PE Ratio compare to its peers?

AVT PE Ratio vs Peers
The above table shows the PE ratio for AVT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average11.6x
NSIT Insight Enterprises
12.8x9.5%US$3.4b
ARW Arrow Electronics
5.3x-19.2%US$7.4b
PLUS ePlus
13.9x4.3%US$1.4b
CNXN PC Connection
15.5x3.8%US$1.4b
AVT Avnet
6.3x-5.3%US$4.3b

Price-To-Earnings vs Peers: AVT is good value based on its Price-To-Earnings Ratio (6.3x) compared to the peer average (11.9x).


Price to Earnings Ratio vs Industry

How does AVT's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Earnings vs Industry: AVT is good value based on its Price-To-Earnings Ratio (6.3x) compared to the US Electronic industry average (16.8x)


Price to Earnings Ratio vs Fair Ratio

What is AVT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AVT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6.3x
Fair PE Ratio14.7x

Price-To-Earnings vs Fair Ratio: AVT is good value based on its Price-To-Earnings Ratio (6.3x) compared to the estimated Fair Price-To-Earnings Ratio (14.7x).


Share Price vs Fair Value

What is the Fair Price of AVT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AVT ($45.77) is trading below our estimate of fair value ($54.58)

Significantly Below Fair Value: AVT is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Avnet forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-5.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVT's earnings are forecast to decline over the next 3 years (-5.3% per year).

Earnings vs Market: AVT's earnings are forecast to decline over the next 3 years (-5.3% per year).

High Growth Earnings: AVT's earnings are forecast to decline over the next 3 years.

Revenue vs Market: AVT's revenue is expected to decline over the next 3 years (-0.1% per year).

High Growth Revenue: AVT's revenue is forecast to decline over the next 3 years (-0.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVT's Return on Equity is forecast to be low in 3 years time (12.1%).


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Past Performance

How has Avnet performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


30.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AVT has high quality earnings.

Growing Profit Margin: AVT's current net profit margins (2.8%) are higher than last year (1%).


Past Earnings Growth Analysis

Earnings Trend: AVT's earnings have grown significantly by 30.8% per year over the past 5 years.

Accelerating Growth: AVT's earnings growth over the past year (259.2%) exceeds its 5-year average (30.8% per year).

Earnings vs Industry: AVT earnings growth over the past year (259.2%) exceeded the Electronic industry 20.1%.


Return on Equity

High ROE: AVT's Return on Equity (16.5%) is considered low.


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Financial Health

How is Avnet's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: AVT's short term assets ($8.9B) exceed its short term liabilities ($4.3B).

Long Term Liabilities: AVT's short term assets ($8.9B) exceed its long term liabilities ($1.9B).


Debt to Equity History and Analysis

Debt Level: AVT's net debt to equity ratio (34.8%) is considered satisfactory.

Reducing Debt: AVT's debt to equity ratio has increased from 34.3% to 38.4% over the past 5 years.

Debt Coverage: AVT's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: AVT's interest payments on its debt are well covered by EBIT (9.8x coverage).


Balance Sheet


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Dividend

What is Avnet current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


2.27%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AVT's dividend (2.27%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: AVT's dividend (2.27%) is low compared to the top 25% of dividend payers in the US market (3.99%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AVT has been paying a dividend for less than 10 years.

Growing Dividend: AVT's dividend payments have increased, but the company has only paid a dividend for 9 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (14.2%), AVT's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: AVT is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Phil Gallagher (61 yo)

5yrs

Tenure

US$6,151,987

Compensation

Mr. Philip R. Gallagher, also known as Phil, has been the Chief Executive Officer of Avnet, Inc. since November 23, 2020 and serves as its Director Since November 2020. He serves as Member of Executive Boa...


CEO Compensation Analysis

Compensation vs Market: Phil's total compensation ($USD6.15M) is about average for companies of similar size in the US market ($USD6.64M).

Compensation vs Earnings: Phil's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: AVT's management team is considered experienced (4 years average tenure).


Board Members

Experienced Board: AVT's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Avnet, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Avnet, Inc.
  • Ticker: AVT
  • Exchange: NasdaqGS
  • Founded: 1921
  • Industry: Technology Distributors
  • Sector: Tech
  • Implied Market Cap: US$4.204b
  • Shares outstanding: 94.67m
  • Website: https://www.avnet.com

Number of Employees


Location

  • Avnet, Inc.
  • 2211 South 47th Street
  • Phoenix
  • Arizona
  • 85034
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/18 00:00
End of Day Share Price2022/08/18 00:00
Earnings2022/07/02
Annual Earnings2022/07/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.